Lawsuit Claims Meal Delivery Apps Charge Excessive Fees, Increase Prices
Meal delivery apps have become very popular in recent years, and are vital right now for everyone who is self isolating. But some of the most popular apps such as GrubHub, DoorDash, Postmates and Uber Eats were sued on Monday for exploiting their dominance. The lawsuit alleges that these companies impose fees that consumers ultimately bear through higher menu prices, including during the coronavirus pandemic. The lawsuit is not tied just to the current pandemic though.
The lawsuit is seeking class-action status and was was filed in Manhattan federal court. Three customers allege that GrubHub, DoorDash, Uber Eats and Postmates have “monopoly power” that they use against restaurants and consumers alike. Their fees range anywhere from 10% to 40% of purchases, the lawsuit says. They also prevent competition and limit consumer choice through their actions.
Additionally, the lawsuit alleges that food delivery companies force restaurants to charge higher prices even for for dine-in customers. It says that this has made it harder for restaurants to keep tables full, even before the pandemic.
The lawsuit seeks triple damages, including for overcharges, since April 14, 2016 for dine-in and delivery customers in the United States at restaurants that use these delivery apps.
Lawsuit Info
The case is Davitashvili et al v Grubhub Inc et al, U.S. District Court, Southern District of New York, No. 20-03000.
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Really surprised that merchants haven’t sued Uber Eats/ Grubhub over not even setting them up for food deliveries/pickups correctly. 3 of the last 5 app orders I’ve placed (each with a different restaurant), the merchant didn’t even have a way to see what I ordered, so when I got there it was like I never ordered. The apps sure took my money and offered just a refund for all this hassle. How about fully delivering whatever technology and service the merchants need to even be able to be on these apps. The App Marketing Teams sure lets you know that the merchants are on the app and they have all the stickers/plaqards at the restaurants, but the service is broken. And no one seems to care. I’ll go elsewhere after this kind of absurd game.
Recently, I read that some customers are giving good non-cash tips when the food is delivered. A short time later, the amount is either reduced or deleted. I decline to have food delivered and when I sit down at a restaurant to use a Groupon deal, I go with water.
Actually the people filing the lawsuit are idiots. Don’t they know delivery fees have been subsidized by VC funds for a long time? Delivery is not cheap, the companies are just trying not to lose money
Its bizarre how there are four companies holding a monopoly? Unless they are alleging they are in cohoots or owned by one company, this is baseless. If people don’t like the prices stop paying them and they will drop the prices. What part of this is not fair market?
Tino, your entire rant about agreeing to the price is unrelated to the lawsuit’s claims, which is that the companies are in violation of antitrust laws. You would know this if you read the article or the suit itself.
I personally doubt that they are in violation, but it’s an entirely valid premise.
Agree – ambulance chaser hoping to get attorney’s fees paid. What’s next – that food at a sporting event or airport at too expensive!!! Agree price is listed and if you don’t want to pay cancel and go get it yourself! Totally without merit
What a waste of the court’s time. When you buy something, you agree to the price, so I can’t see how paying the listed price of $14.95 for a chicken piccata instead of $12.95 is breaking the law. Drizly’s entire business model is marking up liquor and beer (much to their claim to the contrary) and delivering it.
What is disgusting is when you go to a restaurant and no drink prices are presented until you found out those rum and cokes were $14 each when you get the bill.